A corporation formed by Hughes Aircraft executives has announced that it will sell its leasehold interest in the Marina City Club in Marina del Rey to a Los Angeles development company.
Marina del Rey Properties Ltd. agreed last week to sell its lease on the 37-acre residential complex to J. H. Snyder Co. for an undisclosed sum.
However, the sale is contingent on county approval of a 39-year extension of its lease agreement, the sale of long-term subleases on the residential units and construction of a luxury hotel on the property.
If the sale goes through, J. H. Synder would own and manage 600 units in three high-rise residential towers, 100 units in a low-rise building, two restaurants and 340 boat slips.
For the Record
Los Angeles Times Sunday July 27, 1986 Home Edition Westside Part 9 Page 3 Column 1 Zones Desk 1 inches; 35 words Type of Material: Correction
In Thursday's Westside section, the estimated revenue that the county of Los Angeles could receive from a proposed 39-year lease extension for the Marina City Club in Marina del Rey was reported as $1.4 million. The correct figure is $1.4 billion.
Proposed Ritz-Carlton Hotel
The agreement includes a proposed 308-room Ritz-Carlton hotel, which the county Beaches and Harbors board approved in concept last month.
Negotiations for the sale started about three months ago, about the same time Marina del Rey Properties began renegotiating its lease with the county, said Don Battjes, company vice president. The company wants to extend its 60-year lease with the county, due to expire in 2028, by 39 years to 2067.
Marina del Rey Properties was awarded the lease through competitive bidding in 1968. The lease, which may be renegotiated every 10 years, limits tenant leases to a single year.
Seeks Longer Leases
The company wants the right to sell 30- or 40-year leases to tenants, who would pay a single cash price for the lease and the right to resell it.
Chris Klinger, the county's chief of revenue properties for the marina, said the county would want 20% of the company's income on the sale and resale of the long-term leases. And if the hotel is built, the county wants 7.5% of its annual gross revenue.
The hotel and long-term residential leases could produce an estimated $1.4 million in revenue for the county over the 39-year extension, Klinger said.
Under the present lease, the county receives 7.5% of Marina del Rey Properties' rent income, 3% of the restaurants' gross income and 20% of the lease income from the boat slips.
Better Deal for County
"The aim of our negotiations is to make certain the county makes a better deal than it currently has," Klinger said.
Some marina tenants want more say in interpreting the lease and managing their units and claim that the agreement does not protect them if Marina del Rey Properties or J. H. Snyder decides to evict them in order to sell the long-term leases.
Lavaun Vawter of the Marina Tenants Assn. said that the long-term leases amount to little more than paying rent decades in advance, which most people cannot afford to do.
"There are no tax benefits because you are not buying anything," Vawter said.
The county should offer the tenants a discount on the price of the long-term leases, she said.
Klinger said that the county will offer tenants a 10% discount on the sale price of the leases. The value of the leasehold actually will increase over time, he said.
The county will require Marina del Rey Properties to find banks to provide financing for tenants to help them purchase their long-term leases, making them "financeable as if they are purchasing their own homes. . . . In essence it would be like buying a house or a condominium."
J. H. Snyder has built both residential and office buildings in Southern California, said Jerome H. Snyder, a senior partner in the company.
The company built the Ocean Towers residential complex in 1972 in Santa Monica and managed the complex for several years. It also built the Beverly Glen Park residential development in West Los Angeles and the Coronado Shores condominium complex in San Diego.
"We're very familiar with waterfront property because of our success with the Coronado Shores and Ocean Towers," Snyder said. "We enjoy property that is close to the water, and we think we will do very well."
The company recently finished renovating the Prudential building in Los Angeles, known as Museum Square, and is building the Wilshire Courtyard, a $200-million office complex in the Miracle Mile area of Wilshire Boulevard.